Home Aviation Stamford’s Hexcel merging with Colorado company

Stamford’s Hexcel merging with Colorado company


Stamford-based Hexcel is merging with a Colorado company that also serves the aerospace and industrial sectors in what the two firms are calling “an all-stock merger of equals.”

Hexcel nick stanage
Nick Stanage

Woodward Inc. of Fort Collins, Colorado is an independent designer, manufacturer and service provider of control system solutions and components. Hexcel develops, manufactures and markets lightweight, high-performance structural materials.

The combined company, to be named Woodward Hexcel, will have more than 16,000 employees, manufacturing operations in 14 countries on five continents, and a diversified customer base across multiple markets.

For each company’s respective fiscal year 2019 on a pro forma basis, the combined company is expected to generate net revenues of approximately $5.3 billion and EBITDA of $1.1 billion, or a 21% EBITDA margin.

Under the terms of the agreement approved by the boards of directors of both companies, Hexcel shareholders will receive a fixed exchange ratio of 0.625 shares of Woodward common stock for each share of Hexcel common stock, while Woodward shareholders will continue to own the same number of shares of common stock in the combined company as they do immediately prior to the closing. The exchange ratio is consistent with the 30-day average share prices of both companies.

Upon completion of the merger, existing Woodward shareholders will own approximately 55% and existing Hexcel shareholders will own approximately 45% of the combined company on a fully diluted basis. In connection with the transaction, Woodward is increasing its quarterly cash dividend to 28 cents a share.

Hexcel Chairman, CEO and President Nick Stanage will serve as the combined firm’s CEO. Woodward Chairman, CEO and President Tom Gendron will be executive chairman until the first anniversary of the closing of the merger, at which time he plans to retire from the company and serve as its nonexecutive chairman until the second anniversary of the merger close. At that point, Stanage will assume the role of chairman of the board in addition to his CEO responsibilities.

The combined company’s board of directors will have 10 members, consisting of five directors from each company, including Gendron and Stanage.

“The future of flight and energy efficiency will be defined by next-generation platforms delivering lower cost of ownership, reduced emissions, and enhanced safety,” Stanage said, “and a combined Hexcel and Woodward will be at the forefront of this evolution.”

The merger, which is anticipated to take place in the third quarter, is expected to be tax-free for U.S. federal income tax purposes.

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